[Book] The Wealth of Nature: Economics as If Survival Mattered

[jprussell]

I outlined this post back in December 2021, apparently, but I never got around to handling it. "Luckily" this week I was struck with no idea what to write, so I went looking in my drafts folder in desperation and decided this would work. It's my thoughts on JMG's The Wealth of Nature, which packs an exceptional amount of helpful, smart thinking into a pretty neat package. As always, I'd love to hear what you think.

Comments

[thinking_turtle]

1) There are many theories! I read that Germans created artificial oil during WW2 using the Fischer–Tropsch process. The author suggested that this process is what happens in the crust of the earth, so that oil is not a fossil fuel, but something the earth continuously produces. If he's right, Peak Oil would not mean the beginning of the end of oil, but merely flattening out at a sustainable level.

2) Wow, yeah, those financial assumptions lead to a complex abstraction. Yet it is still a human construct, and in the end nobody will accept an unacceptable outcome. So if one of the assumptions fail, and there are not enough buyers for stock, the government would step in to keep the economy working.

3) Money is a claim on future goods. How can crypto provide that? It all seems so unreal. I don't think society will feel bound to respect crypto like it respects the dollar or the yuan.

Thanks for your reply, and looking forward to your next blog!

[jprussell]

1) Is that the same as the "biotic oil" theory? If true, that would certainly be good news for mankind, but I'm skeptical - oil companies employ geologists who use the mainstream theory of formation (compacted organic matter from millions of years ago) to find where to drill, and they get pretty good results.

2) You have far more faith in the government's ability to "keep the economy working" than I do - again, a place I wouldn't mind being wrong.

3) Sorry, I wasn't explicitly advocating for cryptocurrencies by bringing this up (I was very bullish on them for a while, but now I don't think their energy requirements will let them work in the long run), instead I was saying that folks in that space have thought a lot about what makes money "money" and why fiat currencies are bad at doing that, at least in the long run, and I think most of their critique is useful, even if I no longer buy their prescription. As for whether crypto could work as a claim on future goods, that all depends on whether folks are willing to treat it that way, of course, since money's day-to-day value is largely intersubjective.

And thank you! Working on it now!

[thinking_turtle]

1) After looking it up, the slow transformation of animal and plant matter into oil is called "biotic". The natural physical and chemical thermodynamic process involving just heat and pressure is called "abiotic".

I came across multiple claims that the "abiotic" theory is actually the consensus among Russian scientists. For example:

8. A Dissertation by J.F. Kenney(Joint Institute of the Physics of the Earth Russian Academy of Sciences, Moscow). Here is an extract:

ABSTRACT: For almost a century, various predictions have been made that the human race is imminently going to run out of available petroleum. The passing of time has proven all those predictions to have been utterly wrong. It is pointed out here how all predictions have depended fundamentally upon anarchaic hypothesis from the 18th century that petroleum somehow (miraculously) evolve from biological detritus, and is accordingly limited in abundance. That hypothesis has been replaced during the past forty years by the modern Russian-Ukrainian theory of deep, abiotic petroleum origins which has established that petroleum is a primordial material erupted from great depth. Therefore, petroleum abundances are limited by little more than the quantities of its constituents as were incorporated into the Earth at the time of its formation; and its availability depends upon technological development and exploration competence.

From https://www.getbig.com/boards/index.php?topic=278159.0

[jprussell]

::forehead slap:: Duh, abiotic, of course. I'm going to have to give back my Classics degree.

With that embarrassment out of the way, I did not know that about it being generally accepted by the Russians. I suppose time will tell.